‘An encouraging sign for many buyers’: Economist points to silver lining in red-hot U.S. housing market

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Home prices are up 14% this time compared to last year, and mortgage rates have made the average monthly payment 50% higher over the same period, so affordability is a major concern for people relocating.

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According to a report released Tuesday by real-estate site Realtor.com, nearly half (49%) of sellers said they plan to sell their home for $500,000 and less, with 15% aiming for $200,000 or less. less than that.

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The report noted that this year’s sellers are “looking to buy their next homes at more acceptable price points,” with more than half (53%) of sellers aiming to buy a property for $500,000 and less, and 17% with a cost of one. Looking for $200,000 or less.

Roughly 29% of sellers are trading up, and 32% are making side price changes. (This is the first year Realtor.com has asked these specific questions.)

an encouraging sign
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There are signs that the housing market is slowing down. New home sales fell to their lowest level in April for the fourth straight month, as the pandemic hit higher prices and increased mortgage rates.

The 30-year mortgage rates jumped from just 2.75% in mid-May to over 5.25%. Low mortgage rates made it easier for buyers to buy homes despite record prices.

“The distribution of sale prices points to an encouraging sign for many buyers, who found last year’s housing market extremely disappointing due to rising prices,” said the survey of over 3,000 home buyers and sellers.

“The increase in the number of affordable-priced homes for sale would be welcome news for the markets,” it said, adding that about one-third of homeowners plan to sell their homes in the $500,000 to $1,000,000 trade-up range. Is.

George Ratiu, senior economist and manager of economic research at Realtor.com, said the report “offers hope” for seller-buyers, helped by an increase in remote working, which shows significant staying power.

“Many move-up buyers are taking advantage of the new flexibility to employ creative strategies, such as move For an area that offers homes that meet their family’s needs without breaking their budget,” he said.

(Realtor.com is operated by Move Inc., a subsidiary of News Corp., and MarketWatch is a unit of Dow Jones, which is also a subsidiary of News Corp.)

double edged sword

However, the shift to remote working is a double-edged sword: Working from home also explained more than half of the 23.8% national increase in home prices between 2019 and November 2021, an economic study released last week concluded.

That rise in home prices has pleased homeowners who are able and willing to sell, but it has also hurt millions of first-time buyers eager to get a foot on the property ladder.

Average selling price increased from $435,000 last month to $450,600 and hit a record high. The median home price was more than a record $570,300, underscoring that most properties for sale are on the more advanced side.

What’s more, nearly three-quarters of homeowners surveyed who plan to sell their home in 2022 are also buying a home at the same time, said Ratiu, which, he said, “is already It only adds “complexity” to the challenging task.

“While sellers stand to capitalize on record-high equity on closing their home, they are also facing higher prices and interest rates on their next home,” the report said.

(Jeffrey Bartash in Washington, DC contributed to this report.)

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Credit: www.marketwatch.com /

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